What Are The Duties Of Holding Power of Attorney in Pennsylvania?
If you’ve been asked to hold Power of Attorney for a friend or family member, it is a sign of remarkable trust. Having Power of Attorney over another person’s financial affairs is an enormous responsibility.
There are no requirements for holding Power of Attorney. You don’t need to have reached a certain age or have a specific relationship to the “Principal,” which is the legal term used to describe the person whose financial welfare you would be overseeing. Once Power of Attorney has been assigned, it is effective unless it indicates that it doesn’t go into effect until a specific event occurs, and once it is effective the person holding Power of Attorney — legally known as the “Agent” — will have the power to sign contracts on behalf of the Principal, sell property, including their home, vehicle or other belongings, and make life-changing decisions on their behalf. Because the decision on who should hold Power of Attorney is so important and opens the Principal to so much financial risk, many people select their attorney or even their financial institution.
Power of Attorney can be specific to legal and financial issues or it can be limited to making healthcare decisions on your behalf. When an individual is asked to sign a Power of Attorney document in the state of Pennsylvania, they are essentially signing a contract in which they are pledging four specific duties, and when it comes to Power of Attorney for financial matters, the assignment of power does not actually take effect until the Agent has signed off on these duties. They are:
- To use the Power of Attorney for the specific benefit of the Principal
- To maintain the Principal’s assets separate and apart from your own
- To act on behalf of the principal with reasonable caution and prudence
- To keep complete and accurate records of everything you do on the Principal’s behalf, including a thorough reporting of any and all income and assets you receive and disbursements you make.
The reason that you need to sign off on each of these duties is to ensure that you thoroughly understand what you are taking on in agreeing to hold Power of Attorney. If you would like to discuss the obligations of Power of Attorney or need help in drafting a Power of Attorney document, we can help. Contact our office today to set up an appointment to discuss the process.